NOOSA MP Glen Elmes says the $20 million being sought by the Noosa Council from the Sunshine Coast Council is not to cover the costs of de-amalgamation.
Mr Elmes said the cash settlement claim under dispute related to the "fair disposition of the assets" in the carve-up.
"It does not relate to the de-amalgamation costs at all as the Local Government (De-amalgamation Implementation) Regulation 2013 clearly distinguishes," he said.
Mr Elmes said when the Noosa transfer committee made up of council chief executive officers Brett de Chastel and John Knaggs wound up on June 30, there were five financial matters outstanding.
He said because of the amounts of money involved in these claims, they were "never going to be agreed by the CEOs".
"These will be referred to the (Local Government) minister (David Crisafulli) who doubtless will seek advice from the Queensland Treasury Corporation and then make his decision," he said.
And Mr Elmes said far from claims of a Noosa Council doing it hard financially, the "council is being well managed".
"I have not seen any credible report concerning a budget blowout," he said.
"I am aware that Noosa Council's general rate did not rise at all for the 2014-5 year which is not indicative of a budget blowout.
"Its staffing levels are significantly below the level at de-amalgamation in line with the productivity gains being realised by the local government area across the state."
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